Inventory Planning Blog

Discover an affordable, seamlessly integrated inventory planning optimization solution to SAP Business One for small and midsize businesses. A solution that frees up your resources (including cash), reduces losses from obsolescence, and increases service levels. The tools you need to forecast, plan, and optimize inventory, manage your business more efficiently and meet the demands of customers and suppliers are powerful and affordable.

Inventory planning solutions that forecast, plan and optimize an inventory are found in widespread acceptance in large enterprise companies but these solutions can cost between hundreds of thousands to millions of dollars, take months to implement and are generally not affordable or usable by SMBs.

Eliminate manual work and guesswork to determine forecasts, replenishment plans, stocking levels and reorder points. Because the system handles these tasks automatically, you keep current as business conditions change. Alerts warn you of potential problems before they happen, giving you time to proactively resolve an issue before it becomes a customer service problem.

Because excess and obsolete inventory items are identified, you can maintain your inventory at an optimum level for your current business conditions. Optimization re-balances your inventory mix, which further reduces costs while increasing insight and control of your inventory. You get an added benefit of improving your positive cash flow quickly and with less time.

This easy-to-use inventory planning solution is designed to provide dramatic savings quickly, usually within a few months. As an example, based on an inventory value of $1,000,000 and an average inventory reduction and productivity gains of approximately 20% - 30%, as much as $200,000 to $300,000 in positive cash flow can be realized. That is anywhere from $16,666 to $25,000 per month.

If your inventory investment is $5,000,000 a 20% reduction means a $1,000,000 savings. When you calculate the monthly savings it equates to 19% of the total inventory reduction. This is a combination of reduced cost of money, insurance, warehouse cost, personnel, etc. That’s $15,833 every month and in the first year adds almost $190,000 to your bottom line.

With the integrated solution, there is no need to use the manually-intensive MRP module in Business One. The MRP module is specifically designed to plan material requirements used in manufacturing and to a lesser extent for finished goods inventory. The module generates Production and Purchase Orders needed to produce a final product in the quantities and time specified by the product's schedule - taking into consideration all the requirements for the product's child items.

The user must create a scenario using a 6 step process for each item. If you have hundreds of items to plan every week, this process can be overwhelming much like using spreadsheets. Every time you need to change a parameter like lead time or location or service level, you need to start the process over again. Plus, there is no optimization in the MRP module, so you do not get the cost savings and other benefits mentioned above.